As promised, we look at ten key revelations made at the Presidential Commission of Inquiry in our Bond Scam recap.
But before a look at the revelations, let us explain how the ground was prepared for what is known as the largest financial scam in Sri Lanka’s history.
January 2015 – Following the Presidential Election, the Central Bank of Sri Lanka (CBSL) and the Securities and Exchange Commission were taken under the purview of Prime Minister Ranil Wickremesinghe.
Prior to that, these two institutions were under the purview of the respective Minister of Finance.
Following this switch, PM Wickremesinghe appointed Singaporean Arjuna Mahendran as the CBSL Governor.
This paved the way for what followed, and has been revealed in the Commission of Inquiry.
Arjuna Mahendran, the CBSL Governor, had assured the PM that his son-in-law Arjun Aloysius would not be involved with Perpetual Treasuries (PTL) anymore.
This was because Aloysius’ place as the head of PTL, following the appointment of Mahendran, posed a conflict of interest during his whole tenure as Central Bank Governor.
Despite the assurance, Aloysius continued to be de facto head of PTL from January 2015 to date.
The then-Governor Arjuna Mahendran interfered in the decision-making process of February 27 bond auction – contrary to due process by directing the Public Debt Department to accept Rs. 10 Billion in bids.
Mahendran decided to shift to full auction system.
This was done without a comprehensive study and also without following due process of acquiring Monetary Board approval.
Arjuna Mahendran’s staff allocations in the Central Bank resulted in the placement of Saman Kumara to the EPF, who later was involved in facilitating PTL’s illegal activities.
Arjun Aloysius received inside information from the Central Bank and other government officials.
This matter was clearly evident from the phone call he had with PTL CEO Kasun Palisena on the morning of March 29, 2016 Bond Auction.
The Employees Provident Fund colluded with PTL, facilitating PTL in the manipulation of the market.
This resulted in phenomenal profits for PTL.
PTL used other Primary Dealers to sell bonds at higher prices to the EPF.
Walt & Row Associates (Pvt) Ltd, a legal firm, lists Arjun Aloysius as a Director.
This firm paid the rent for Former Minister Ravi Karunanayake’s Monarch Residency Penthouse-Style Apartment.
The Apartment was thereafter afquired by the Karunanayake Family using a loan facility.
This was paid back using money belonging to Global Transportation and Logistics Chairman T.V. Lakshmikanthan.
How much did the penthouse cost? – Rs. 165 million.
Former Finance Minister Ravi Karunanayake requested state banks to bid low in March 2016, violating an assurance to the state banks.
This caused an opportunity loss to
In turn however, delivered massive profits to PTL
Arjuna Aloysius and those at Perpetual Treasuries had contacts with Central Bank Employees ‘Saman Kumara’, ‘S. Pathumanapan’, family members of the two and also several others from various institutions.
PTL created this network of dealers from several institutions for their transactions and their informants were bribed heavily for giving market sensitive information.
Arjuna Mahendran submitted a document claiming the need for Rs. 75 Billion for RDA Projects bearing the signature of the Former Finance Minister.
This sum has been refuted by;
According to the Treasury’s Deputy Secretary, “there was never a requirement for additional funding”.
Dec 18, 2017 0
Dec 18, 2017 0